Barry v. Wells Fargo Bank, N.A.

Background

Billie Barry alleged that Consolidated Asset Recovery Systems, Inc. (CARS), and Advanced Recovery Solution LLC (ARS) violated the Fair Debt Collection Practices Act, Minnesota’s wrongful-repossession statute, and Minnesota common law during the repossession of her vehicle. The opinion states that Wells Fargo Bank, N.A., held the vehicle’s security interest and hired CARS, which in turn engaged ARS to repossess the vehicle.

Barry alleged that an ARS agent pounded on her apartment door and patio door, yelled that he would call the police, and repeatedly contacted her through the apartment’s intercom system. She further alleged that, after the entire past-due amount was paid on January 12, 2018, an ARS agent returned, entered her garage, damaged the garage door and frame, and repossessed the vehicle. The vehicle was returned on January 16, 2018.

Barry moved under Federal Rule of Civil Procedure 15 for permission to file a second amended complaint adding a request for punitive damages. Under Minnesota law, punitive damages require clear and convincing evidence that a defendant deliberately disregarded the rights or safety of others. The court evaluated whether the proposed amendment was futile, meaning whether the proposed allegations could survive a challenge for failure to state a legally sufficient claim. At this stage, the court accepted the pleaded facts as true and considered reasonable inferences in Barry’s favor.

Analysis

As to ARS, the court concluded that the allegations plausibly supported punitive damages. The alleged facts included ARS’s agent’s threatening and persistent conduct, the communication that the past-due amount had been paid, the subsequent repossession, and the alleged entry into and damage to Barry’s garage. The court stated that these allegations supported a reasonable inference that ARS deliberately disregarded Barry’s property rights. The court did not decide whether the evidence would ultimately prove that ARS acted unlawfully or met the punitive-damages standard.

As to CARS, the court reached a different conclusion. The proposed complaint alleged that CARS hired ARS to conduct the repossession but did not allege facts showing that CARS specifically directed ARS to carry it out in the alleged manner. The court therefore found that Barry had not plausibly alleged that CARS itself deliberately disregarded her rights.

Disposition

The court ordered that Barry’s Motion for Leave to Amend First Amended Complaint to Plead Punitive Damages was GRANTED IN PART and DENIED IN PART. Barry could file a second amended complaint by February 5, 2019, but had to remove the punitive-damages claim against CARS, remove claims against Wells Fargo consistent with an earlier stipulation and order, and include specified exhibits.

The opinion’s supplied case name identifies Wells Fargo, while the opinion’s caption lists CARS and ARS as the defendants. The supplied judge information identifies Michael Davis, but the order is signed by Becky R. Thorson, a United States Magistrate Judge; this summary uses the signing judge.